We don’t have actual sales numbers for Surface yet, but let’s put this one in a little perspective anyway. The most thrown around number is that Microsoft sold 1 Million Surfaces during the holiday season. The Surface was only available for about two out of three months. And until well into December it was only available at the 23 Microsoft Store locations, 32 “pop-up” holiday stores (many of which were just small kiosks in shopping malls), and online at the little known http://www.microsoftstore.com. Meanwhile in the previous quarter Apple sold around 14 million iPads at its approximately 400 Apple Stores, and tens of thousands of other retailers around the world (Best Buy alone has 1400 locations).

Let’s ignore both online and 3rd party retail outlets and assume all sales of both products went through company-owned store (nearly true for Surface). One could do more precise numbers (actual selling days for example), but I’m just going to ballpark this. Assume Surface sold 1 Million devices over 65 days or 15385 Surfaces per day. They had 55 stores and kiosks, so that works out to 280 Surfaces per store per day. Apple sold 14 million over 90 days or 155556 iPads per day, or 389 per Apple Store per day. Not a bad performance by Microsoft actually, but this is the best case for Apple!

Apple gets about 11% of its revenue through the Apple retail stores. So obviously most sales do not come through that channel. Apply any rational number to spread iPad sales over the entire distribution system and the Microsoft Surface numbers start to look outstanding. If iPad sales were split evenly between Apple retail stores and other outlets then Apple was selling 195 iPads per store per day, or far less than the Surface sales rate through the equivalent (and in its case only) channel. Again that’s being very generous to Apple retail stores.

My point here isn’t to claim that somehow Surface sold better than iPad. That’s total nonsense. My point is that when you put the Surface numbers in the kind of context that most products sold through retail are evaluated on the doomsayers are full of bull excrement. Given a distribution channel of only 55 outlets and availability for only part of the quarter, hitting 1 million units sold would actually be an outstanding achievement! I didn’t even take into account that not all 55 outlets were in operation on the first day of Surface availability or that their were some initial product shortages.

It will be interesting to see what Microsoft says when they announce last quarters financial results this week, but if they actually hit 1 million Surface devices sold I’d consider it a Home Run (though not a Grand Slam). Microsoft has a long way to go to be successful with the Surface family, Windows RT, or even Windows 8. But put in proper context the Surface may be off to a great start, not the dismal start that many would have us believe.

Exactly. Microsoft didn’t even being to tap into the non-U.S. markets because it had no distribution outside the U.S. It took a brave soul to order a Surface online without having any opportunity to see and handle one.

I was arguing the other way – number sold through physical stores is way less. My assumption would be that the US makes up 70-80% of sales. I would also be more inclined to say that 20%+ of US sales are online. Making only around 600,000 sold through retail stores.

Either way, the main point still stands that 1m sold still is a respectable number given the retail presence.

I don’t disagree with your analysis and have found a lot of early adopters who did indeed just order online sight unseen. Of course that dynamic works even better for Apple. I found a lot of people who knew about the Surface but were reluctant to order one until they saw and played with it. Given no retail presence and so few in circulation they couldn’t do that, until they got to handle mine of course.

Without an official Microsoft breakdown of retail/online sales or knowledge of the number of devices allocated to the original online pre-order, it’s hard to justify your ballpark assumption that most of the sales occurred in the Microsoft retail channel. If I remember correctly, the Surface RT was listed as “sold out” online not long after the online store went live, which would suggest that online sales were quite strong.

THAT SAID… even if the online/retail distribution was 50/50, your ballpark numbers would suggest that at least 140 devices were sold in the retail channel each day. If you were to further assume that each store was open 12 hours a day, that’s 12 devices every hour, or a device every 5 minutes. For a first edition Microsoft hardware device, that’s STILL not bad!

I couldn’t think of a reasonable way to talk about online sales, but keep in mind that Apple has a much stronger online retail presence than Microsoft. And given that you see iPads everywhere it is easier to just order one online then it was with the not yet seen Surface. Also, in online channels you had ever dominant Amazon carrying the iPad but not the Surface.

So yeah I wasn’t trying to do a precise business analysis (which I would hope an FA would do) but rather illustrate that Surface sales were likely rather good given the limited distribution.

Ok. I get what you’re saying. But, until we see MSFT success moving SurfaceRT units in total greater quantities, I fear the new OS will die, like OS2. What number of buyers will it take to reach a self-sustaining market? I don’t know. Does anyone have thoughts on that?

Maybe Surface RT was a big trial to shake out the process on SurfacePro distribution. I doubt it, but I hope lessons were learned.🙂

This analysis assumes that the purchases from stores will grow linearly as more stores open. This obviously isn’t the case, with many making the trip to Manhattan to buy a surface that would have otherwise just visited a local store (I was one of them).

Not really. To begin with the average consumer wouldn’t be as inclined as you to make such a trek (and in many cases it would be worse, outside the U.S. their were no physical retain options) but that doesn’t matter. And note I didn’t try to project that if you had more stores you’d maintain the same sales rate per store that Microsoft saw in 2012. I’m just pointing out that 1 million devices would be a great performance given the limited distribution and timeframe. People who wanted 2 million, 5 million, whatever would have to be smoking something to believe that was achievable. Now come next holiday season with a large retail footprint and a presumably refreshed product one could rightly judge Microsoft on its ability to sell several million devices.